This is as inflation has continued to surprise on the downside, a trend expected to remain until the second half of this year.

Consumer inflation was 3% in December, up from 2.9% in November, comfortably below the midpoint of the SARB’s  target range of 3 to 6%.

The SARB has cut rates twice by 25 basis points each time in the past year, bringing some relief to indebted consumers.

At its last Monetary Policy Committee meeting in November, the SARB raised concerns about a challenging global economic landscape. This creates conditions for a shallow rate-cutting cycle.

Economists expect the central bank to cut rates this time but keep rates unchanged at its March sitting.

It’s expected inflation will remain subdued over the medium term, with the SARB forecasting an average of 4.5% this year, from an annual average of 4.4% last year.

--SABC--